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Abstract:

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CEP Discussion Paper
Trading Partners and Trading Volumes: Implementing the Helpman-Melitz-Rubinstein Model Empirically
J. M. C. Santos Silva and Silvana Tenreyro June 2009
Paper No' CEPDP0935:
Full Paper (pdf)

JEL Classification: C13; C50; F10


Tags: gravity equation; heteroskedasticity; jensen's inequality

Helpman, Melitz, and Rubinstein (2008)–HMR–present a rich theoretical model to study the determinants of bilateral trade flows across countries. The model is then empirically implemented through a two-stage estimation procedure. This note seeks to clarify some econometric aspects of the estimation approach used by HMR and explore the consequences of possible departures from the maintained distributional assumptions.

This paper has been published as:
Trading Partners and Trading Volumes: Implementing the Helpman-Melitz-Rubinstein Model Empirically, J. M. C. Santos Silva and Silvana Tenreyro, Oxford Bulletin of Economics and Statistics, Volume 77, Issue 1, February 2015